September 09, 2009

As New Owners Take Over Agriprocessors, Postville Worries

Postville’s City Council initially voted to support the idea of a community benefits agreement, but later voted to withdraw support for such an agreement—a development first reported on the blog Failed Messiah.

The new owners of the beleaguered kosher meat company Agriprocessors are quickly facing criticism over their early management of the company.

A team of three men took over control of Agriprocessors — now called Agri Star — at the beginning of August. The new team, led by Canadian businessman Hershey Friedman, and using the corporate name SHF, bought Agriprocessors out of bankruptcy in July. Their purchase of the kosher company came a little more than a year after it was the target of a massive immigration raid that led to criminal charges against the previous owners, the Rubashkin family.

The Rubashkins have been widely assailed for their management of the company’s slaughterhouse in the small Iowa town of Postville. Some town leaders in Postville say that since buying the company in July, Friedman and his new ownership team have given their own cause for concern.

“I’m quickly starting to become impatient with the company’s lax attitude toward civic responsibilities,” said Jeff Reinhardt, a member of Postville’s City Council.

Reinhardt and other local leaders expressed concern with the continuing involvement of Rubashkin family members in the company, and with the handling of new employees coming into the town. But the biggest concern has been the new owners’ refusal to meet with many community leaders and activists from both inside and outside Postville who have expressed an interest in being briefed on the company’s plans. “At this point in time, it would be very helpful for them to do something different than the old owners — to actually come in and have a meeting with members of the community,” said Steve Brackett, the pastor at St. Paul Lutheran Church in Postville. “I think they are very busy, but I also think it would go far to calming tensions if they would at least host a community meeting.”

Brackett is the head of a new Postville Community Benefits Alliance, which is hoping to negotiate some agreement with the new owners on how the town and company can relate to each other — a big issue given the kosher meat company’s outsized effect on the city of 2,000 residents. The immigration raid and subsequent bankruptcy of Agriprocessors led to a mass exodus of residents and devastated the local economy in Postville. Brackett said that his alliance made multiple requests for a meeting with the new owners and eventually heard back that “at this point, they don’t have time.”

Friedman did not respond to requests for comment. His lawyer, Shalom Jacob, said that the new management team was too busy running the company to meet with local civic leaders.

“I know they have a lot of positive ideas and intentions for the town and the civic areas and the people, and what they will do,” Jacob told the Forward. “But the first priority has to be turning this company around.”

Friedman owns a plastics company in Montreal, Polystar Packing, and another in Brooklyn, Favorite Plastics. Friedman bought Agriprocessors, in partnership with his son-in-law, Daniel Hirsch, a Brooklyn accountant. It is Hirsch who has been in Postville overseeing the daily operations of the plant. The plant is currently operating with a small staff and producing only chicken and turkey, with plans to slowly re-open the company’s beef production capacities.

Hirsch has met with Postville’s mayor and a few City Council members to lay out Agri Star’s plans. The mayor did not return calls seeking comment, but the city administrator, Darcy Radloff, said of Hirsch: “We welcomed him to the community and talked about him being a good corporate citizen.”

“They plan on operating a good business up there,” Radloff said.

Hirsch has also met with Aaron Goldsmith, a local businessman and a leader of the town’s Orthodox Jewish community. Goldsmith said that Hirsch had expressed an unwillingness to speak with members of the Community Benefits Alliance because the alliance had pushed for a binding legal agreement that would hinder the development of Agri Star.

“The company is not interested in the community benefits agreement,” Goldsmith said. “Nobody feels this is an equitable proposal.”

Brackett, who is leading the push for an agreement, said that his group has no specific agreement in mind, and at this point wants only to start a discussion with the company. One particular point of tension has been the involvement in Brackett’s alliance of Jewish organizations from outside Postville. In addition to Postville’s Lutheran and Catholic churches, the alliance includes Jewish activist groups from Minnesota and Illinois that participated in providing relief to Postville after the immigration raid. These liberal Jewish groups had an adversarial relationship with the old owners of the company.

“We have certainly picked up a wrongful assessment — and a tone on their part that just doesn’t represent who we are as organizations,” Ramsey said.

“Our purpose for being there is to do everything we can do to assist the community in Postville — we want nothing more than for this plant to be successful and for the company to be good corporate citizens,” she said.

The members of the Community Benefits Alliance are not the only groups reporting having had trouble getting information out of the new owners. Kosher food-certifying agencies have complained, as has the United Food and Commercial Workers, a union that tried to organize the workers under Agriprocessors’ previous ownership. Scott Frotman, a UFCW spokesman, said that the union had made requests for a meeting with the new owners in July, when the sale was finalized, and have not heard back.

“It’s unfortunate, given the company’s history,” Frotman said. “They have an obligation to Postville to come forward to talk about their vision for the company and the future.”

Within town, the company is already making its mark, having taken over full operation of the plant in early August. New workers have started to move to the town looking for work, and local religious leaders said that the company has not made provisions to help these workers establish themselves. Father Paul Ouderkirk, the priest at the local Catholic church, said that workers coming to town were turning to the churches for food and housing. Reinhardt said this reminded him of the situation under the Rubashkins.

“The company should take some responsibility for this,” Reinhardt said. “This is the same old story over again.”

Part of the reason for concern is that Heshey Rubashkin, the son of the old owner, Aaron Rubashkin, is still employed at the plant, as are other family members. Heshey Rubashkin’s brother, Sholom, is awaiting trial on charges of bank fraud, child labor violations and immigration law violations, and is not allowed to have any involvement with the company.

Jacob, the company’s lawyer, said that in employing members of the Rubashkin family, the company is merely continuing practices that were also used by the bankruptcy trustee.

“These are not people who are in management — these are employees, and this is something that was approved by the trustee,” Jacob said. “I don’t think anybody expects us to fire people just because of their name.”

Goldsmith said that within Postville’s Jewish community the concern has not been about how similar Friedman is to the Rubashkins, but rather how different.

“The Rubashkins ran their business like it was a communal foundation — and they supported the Jewish school and the synagogue here completely,” Goldsmith said. The new owners, Goldsmith said, “have made some minimal support of the school, but it was a very big challenge to get them to do even that. One of the concerns is that they are not stepping into the Rubashkins’ shoes — they are creating a different kind of business.”

Ramsey, at the Jewish Council on Urban Affairs, said that she wants to see the new owners go in a new direction, but is still waiting for evidence.

“They are the ones who get to set the tone,” Ramsey said. “The longer they don’t do that, the more nervousness will be felt by the community, and the more speculation will grow.”

The new owners can't win. If they had come to town and ran things like the Rubashkins, they would have been criticized. But now they are being criticized because they are not like the Rubashkins.

I understand all of the concerns and think they are very justifiable, but lets give them time and a chance. They are our only hope. If they are successful in turning Agri around, the town and communities will survive. If they fail, no one wins.

No matter how well intended the Community Benefits Alliance may be, it's easy to assume that the lack of interest on Freidman's part sends the message; "this is none of your business and don't tell me how to run mine." And indeed, if this business was anywhere else, under any other circumstances, I would tend to agree. But his silence could also be saying "I'm really busy trying to pull this place together right now and when I have time to take a breath I'll fit you in." If he was worried about his image, he would have already had a PR man handling details with the community. I hope he becomes more personable and willing to share as time goes on. Postville natives are used to knowing each other and their business. Mr. Friedman may not have the same expectations moving into a small town. I wish all the citizens of Postville and employees of Agri-Star the best of luck. Many lessons have been learned so there is hope that even if history tries to repeat itself, people will speak up sooner and louder to the proper authorities.

“They plan on operating a good business up there,” Radloff said.
alliance made multiple requests for a meeting with the new owners and eventually heard back that “at this point, they don’t have time.”
Isn't this quite contradicting! Any good business knows they are only as good as the community they become apart of! Too busy, I guess the town should say the same to them and their so called new come employees! Outrageous! Support your own and no more free handouts! So much for being a good business. Older folks have a saying, If it doesn't sound right, smell right or feel right, THROW IT OUT! There is no fooling age/experience.
Reinhardt said. “This is the same old story over again.” I tend to agree and frankly couldn't care less if they are successful or not.

Believe me... the Rubashkins & their cronies, from Heshy on down, still have their talons deep into that place ....

And dont buy into this "well, the Rubashkins are only employed here as employees. They are not a part of management." Thats crap.

As is Friedman's lawyer "you dont expect us to fire people because of their name"

Why not, they have fired people for less.

Father Paul Odekirk is right - same old story all over again.

And another thing - if the new owners are so well intentioned why are they so afraid of entering into a "Community Benefit Alliance"? Whats the big deal? Don't they want to be good corporate neighbors?

It's very clear now, that the Chabad Community, some members of the City Council and Agri-Star, prefer to let Postville continue on the current path of disintegration, as an Iowan City, to be replaced by a factory-town, furnishing, basically slave-labor to the plant.

I think the message from all this is more than abundantly clear; the plant and the Chabad Community have to go, if the Citizens of Postville want their town back.

I have stated before that a BOYCOTT against Agri-Star will accomplish this.

If someone else has other ideas to yield the same results, please share them.

Plants of Mr. Friedman we know about are located in the largest metro area in the Province of Quebec (which is the second largest in Canada,) and the one in Brooklyn, in the largest metro area in the USA.

Hometown Postville:
Nice post!
Truthasitis:
In case you did not know, if the feds find any association/partnership between Friedman and Rubashkin, Agri will get shut down, no ifs ands or buts. So please don`t make up information.
As for why there was no meeting yet with the Community Alliance, the answer is quite simple, yes it would be nice to meet however now is not the time, they are too busy trying to re-organize. In the event they meet in a few months and come up with some type of draft together then in hind sight we will all look back and say all is well. Unfortunately you can`t make all the people happy all the time and this is one of those instances. As Hometown Postville stated, Friedman is in a lose lose situation.
Sage:
Based on your past posts, it seems as though you are probably on the board of hechsher tzedek. You have your work cut out in order for you to succeed on you new ambition, so perhaps go back and re-draft some of the criteria required to obtain the hechsher, instead of posting the same garbage time and again.

This town cannot afford more of the same old. The city budget is very constrained. New people coming to town without money is not the town's problem. There have been so many handouts the pot is empty. This is one of the reasons for trying to organize the CBA. The churches are depleted. They have other obligations to meet than supporting people who come on a whim because there might be a job. It must be the cell phone network. Someone is here who thinks there will be jobs and calls friends to come. Postville is entering this "new owner" period with their eyes open. Hopefully administration will be aware of any dangers but also open to a business model of good working conditions, living wages and benefits. A business enterprise with these goals will attract local, stable workers with interest in their jobs and the employer.

Sage; In theory, a boycott sounds great. But as Shmarya once pointed out, the area is too economically depressed to put that into practice. Shipping costs a lot of money, so shipping to another market is not feasible. It's not just a matter of hauling it to the next slaughterhouse; if they want top dollar for kosher beef, it needs to go to the nearest kosher plant, which I don't know where it would be. Kosher beef pays much more than regular market beef. With the recent price of corn fluctuating wildly and summer storms that have destroyed crops, these farmers depend on making up the difference with the added kosher benefit. This is why local producers have been so passionate about knowing what Freidman has in store. They may be only one little dot on the map in the corner of Iowa, but that little dot is their home and their livelihood.

But, if Agri-Star succeeds, using the RCF Business Model, as it appears to be doing, Postville will go down the drain as an Iowan City and become simply a factory town, supplying cheap labor to the plant.

IHMO, if Friedman had real intentions to make Agri-Star a good corporate citizen, he had plenty of time to put things in writing and meet with Postville Citizens, before taking over operations.

Agri-Star's failure to be up front with Postville, or send anyone to the last CBA meeting, speaks volumes.

This is why placing a BOYCOTT on Agri-Star, while painful in the short run, may be the ONLY chance Postville has to rebuild.

Truth as it is:
I know a lot more than you think, and the Rubashkin`s have no final say in management decisions, perhaps their opinion is heard but that is as much power they have. And if you read my post correctly, it reads association/partnership, so if you don`t like the word association then focus on the word partnership. The feds are well aware who among the Rubashkin family is still employed so aparently all is well with them.

In a company like Agri-Star/Processor, titles mean nothing. The question is what responsibilities do Heshy, Getzel, etal, have at the plant? The feds may be naive about such things (making determinations based on titles), but we should not be.
Shabbat Shalom

You have already backed up from "any association" to, "perhaps their opinion is heard"...... You have changed from an "they have absolutely no say" in how the plant is run to "well, they can express an opinion."

Do you think other invididuals have their opinions heard by the new owners? Do you even think they have access to them?

Actually, the opinions that are expressed by the Rubashkins are really the LEAST of the influence they exert. But, since you know so much, Pablo Faird, I wont bore you with details you already claim to posses.

And, actually, state of Jews, Pablo Faird is correct in one thing The feds know which family members still work there, what they do etc.

What I would not be so confident of, Pablo Faird, is that the govt is done with all this. I would not bet they will stop at Sholom Rubashkin.

For all his faults, one somewhat noble thing Sholom is apparently trying to do is take the fall for all this for sake of the family ( especially his brother Heshy.)
( Though do yourself a favor and dont get me started on all the other people he has roped in along the way...)

For one to be supposedly so guilty and the other so supposedly innocent is, to say the least, rather unbelieveable. I wouldn't bet the govt believes it either.

A trial is coming soon. Things will come out. Things all of us did not know will come out.

TheTruthAsItIs- You raise some very interesting points about SMR taking the fall for others. Perhaps that explains what appears to be misguided loyalty toward him and the passion toward his defense fund-raising. No wonder those in his group act as if he is above the law. If that is indeed the case, when he is incarcerated,I would guess his caretaker's palms will be very well greased and he will reside in a country club atmosphere with all the religious exemptions and accommodations it affords. Remember the Jewish man who held up the convenience store in Decorah and murdered the clerk? Didn't he just get shipped off to some rabbinical school to focus on the Torah? I've never heard of that sort of sentence; especially the fact that it was tolerated in Iowa. eg; You are hereby ordered to study the Bible and attend 4 years of seminary after which you will be proclaimed an honest and productive member of the community??

Just another thought.... do you suppose SMR's attorneys will be able to work out a home-based incarceration? Due to his large family's needs? his this excuse and that excuse? I can see it now- he will wear a tracking device, have to register with his PO every time he leaves the house/the country, parties to be held in his home, etc...